February 22, 2016

Form 5472 is used to provide information required under Code §§6038A and 6038C when reportable transactions occur during the tax year of a reporting corporation with a foreign or domestic related party. A reporting corporation is either a U.S. corporation that is 25% foreign owned or a foreign corporation that is engaged in a U.S. trade or business. The reportable transactions are essentially related party transactions. Consequently, Form 5472 is an important tool in IRS audits relating to transfer pricing and Code §482. See IRM §4.61.3.4.1.

Part II of Form 5472 requires that the reporting corporation name its direct 25% foreign shareholders as well as its ultimate indirect 25% foreign shareholders. Treas. Reg. §1.6038A-2(b)(1)(ii). Rev. Proc. 91-55 illustrates the direct and indirect 25% shareholder reporting requirements of Form 5472 by providing three examples.

We have created situational charts of the examples in Rev. Proc. 91-55. One of the charts is shown below and the other two have been added to andrewmitchel.com, where you can find hundreds of other situational charts.

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The posts on this blog have not been verified for accuracy. You should consult an attorney for legal advice regarding your own situation. These posts are not updated for changes in the tax laws. Further, these posts should not be relied upon for any purpose whatsoever.